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Friday, 21 August 2015

Since the Dallas Buyers Club LLC v iiNet Limited[2015] FCA 317 decision in Australia, speculative invoicing, or the potential of it, seemed to loom large over the continent in the southern hemisphere. In the case Justice Perram sanctioned the disclosure of the identities of nearly 5000 individuals who had shared the movie Dallas Buyers Club online on the BitTorrent protocol. The Court did acknowledge the possibility of misuse with the information, and without proper oversight, a cause for concern for those who would be affected.

Online pirates were terrified of the possible outcome of the case

Under the Australian Federal Court Rules 2011 disclosure as to individuals' identities can be ordered by the Court so long as certain requirements are met, specifically if there is a cause of action against a certain individual or individuals, their identities are not discernible, and that another person knows or is likely to know those individuals' identities (ISPs in this instance). Justice Perram was satisfied that this was the case in terms of the file sharers, and ordered the disclosure of the sharers' identities by the ISPs to Dallas Buyers Club LLC, pending certain safeguards.

The case has since moved onto more substantive considerations regarding the proposed draft letter (required by the court prior to disclosure) and the claimant's demands in Dallas Buyers Club LLC v iiNet Limited (No 4)[2015] FCA 838.

Justice Perram did not set out the exact composition of the draft letter put forth by Dallas Buyers Club, but did explain that "[i]t was quite long and, on the whole, negative about people copying the Film... Critically, however, it did not make any demand for a sum of money. Instead, it encouraged recipients to make a telephone call to discuss the matter or to engage in email correspondence with an unidentified representative of DBC". No scripts had been submitted to the court as to the potential content of these discussions via email or telephone, and this Kat wonders what it would have entailed (but remains quite sceptical as to their fairness or even soft-handedness). No specific monetary damages or demands were set in any prior hearings or in the documents shown to Justice Perram.

Dallas Buyers Club's ultimate monetary claims were set under four respective headings by the Court:

(a) a claim for the cost of an actual purchase of a single copy of the Film for each copy of the Film downloaded. This is quite a bit more than the cost of renting a copy of the Film on a 48 hour basis from a platform such as iTunes. Here DBC’s argument is quite clear: the copy that has ended up on the infringers’ hard drives is not a 48 hour rental copy but a permanent one;

(b) a claim for an amount relating to each infringers’ uploading activities. Here DBC suggested that the number of uploads was potentially very large given the way BitTorrent operates, with each user sharing the Film with other users by means of transfers of slivers across the network. DBC submitted that it was entitled to obtain a one-off licence fee from each uploader on the basis that each was engaged in the widespread distribution of the film. It is not trespassing on DBC’s legitimate confidentiality concerns to say that the sum sought by DBC in relation to this head of damages was substantial;

(c) a claim for additional damages under s 115(4) (i.e. punitive damages) depending on how many copies of other copyrighted works had been downloaded by each infringer; and

(d) a claim for damages arising from the amount of money it has cost DBC to obtain each infringer’s name.

As is plainly clear the demands made by Dallas Buyers Club are quite onerous, and would amount to a substantial amount of money from each individual. The judge did accept claims under sub-headings a and d, as the seeking of losses relating to the purchase or rental of the product (whether one would have paid for them or not), and for legal costs associated with the order and its execution, were quite appropriate. As for the other sub-headings Justice Perram was not convinced they would result in a proportionate amount, and called the requirement to pay a one-off license fee to Dallas Buyers Club for sharing the file "...so surreal as not to be taken seriously". He further rejected Dallas Buyers Club's claim for additional damages, which they would base on how many other movies they have downloaded. Arguably the quantification if this would probably be incredibly hard, and Justice Perram dismissed the claim due to its inconsistency with the law.

Ultimately, the Court allowed the claims under sub-headings a and d, but refused to lift the stay pending more detailed undertakings from Dallas Buyers Club.

The case mirrors thoughts presented both in the UK and Canada in Golden Eye [Katposts here and here] and in Voltage Pictures LLC v John Doe[2014 FC 161], which aimed to protect the interests of the consumer as well as those of the copyright holder. What Australian infringers will ultimately pay remains unclear, but Justice Perram's judgment makes a lot of sense to this Kat, allowing for the recouping of lost monies without unduly burdening the individuals with payments above and beyond their level of infringement and possible ability to pay. With the future introduction of the reworked ISP Code of Practice, the case leaves a precedent from which the industry can build on in Australia.

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